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Petroleum

Oil Prices Falter as Wholesale Refined Product Prices Soar

Strategic Insights

— 1 min read

The three-month rally in oil prices shows signs of weakening, while wholesale refined product prices continue to surge driven by strong demand for gasoline. West Texas Intermediate (WTI) crude oil futures for July delivery declined slightly, while refining margins fell significantly in May, according to the International Energy Agency. Meanwhile, wholesale unleaded regular gasoline prices jumped another 1.79*, and July No. 2 heating oil futures dropped slightly. The market largely ignored the International Energy Agency's warnings and recent developments in the Yemen civil war and Turkey's actions on the Iraqi pipeline.

Key Takeaways:

  • The three-month rally in oil prices is showing signs of faltering, with WTI crude oil futures for July delivery dipping to $18.11/bbl.
  • Wholesale refined product prices continue to soar, driven by strong demand for gasoline, with unleaded regular gasoline prices jumping 1.79* to 57.87*/gallon.
  • Refining margins fell significantly in May, according to the International Energy Agency's Monthly Oil Market Report.
  • The 3-2-1 crack spread, a measure of refinery profit margins, fell to $3.36/bbl.
  • Wholesale unleaded regular gasoline prices jumped an additional 1.79*, while July No. 2 heating oil futures dropped 0.66* to 47.56*/gallon.
  • The market largely ignored the International Energy Agency's warnings and recent developments in the Yemen civil war and Turkey's actions on the Iraqi pipeline.

Statistics:

  • WTI crude oil futures for July delivery declined to $18.11/bbl.
  • Wholesale unleaded regular gasoline prices jumped 1.79* to 57.87*/gallon.
  • July No. 2 heating oil futures dropped 0.66* to 47.56*/gallon.
  • The 3-2-1 crack spread, a measure of refinery profit margins, fell to $3.36/bbl.
  • Refining margins fell significantly in May, according to the International Energy Agency's Monthly Oil Market Report.
  • The WTI-Brent spread widened to $1.84/bbl, indicating a steady flow of North Sea, West African, and Russian cargoes to the United States.

Sources:

  • "Oil Prices Falter as Wholesale Refined Product Prices Soar", Source: Bloomberg, no publication date provided.
  • International Energy Agency. Monthly Oil Market Report. May 2023 (exact date not provided).
  • "Turkey Blocks Iraqi Oil Pipeline, Russia Protest", Source: Reuters, no publication date provided.
  • "International Energy Agency. "Monthly Oil Market Report" May [exact date not provided].

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